Widespread oil seeps in many areas of West Greenland

Encouraging new surface shows of oil found during 1996 and 1997 demonstrate that oil impregnation and seepage is much more widespread in central West Greenland than previously known. Evidence of oil at the surface is found throughout the onshore region from northern Disko across Nuussuaq, several islands to the north, to the southern part of Svartenhuk Halvø (see Map 1), implying that generation from oil-prone source rocks has occurred along this 150 km long zone within the Mesozoic­Tertiary Nuussuaq basin. Although surface shows have been known since 1985, the widespread distribution and the intensity in specific areas are very promising signs for the exploration possibilities in West Greenland.

Recognition of oil staining and seepage in the volcanic succession overlying the Nuussuaq Basin was an important factor in attracting industry to the area in 1994­95, when grønArctic energy inc. was awarded an exclusive licence for an area on western Nuussuaq. The first fresh oil samples that allowed reliable organic geochemical results were collected in August 1992 along the coast at Marraat on western Nuussuaq. This area with surface shows was enlarged to 8 x 5 km during field work in 1993 and 1994. In 1993 oil impreg-nation in the volcanics was also confirmed in a thick zone in the Marraat-1 drill hole (see Ghexis no. 7, February 1994, and Ghexis no. 9, March 1995). During drilling of GANW#1, GANE#1 and GANK#1 by grønArtic in 1994 and 1995 more oil was discovered, both in cores of volcanic rocks and underlying sediments and at the surface in the vicinity of the drill sites. These discoveries further enlarged the area with oil impregnation.

Many new oil shows documented

During the 1996 and 1997 field work by GEUS and collaboration partners, a systematic approach was used for "oil hunting" based on previous experience. Many localities through-out the Disko-Nuussuaq-Svartenhuk Halvø region were checked; some were close to previously known localities, others were in new areas where seepage was considered likely on the basis of a general knowledge of structure, stratigraphy and lithology. As a rule of thumb, oil seepage and staining is mainly observed on outcrops that fulfil the following criteria:

a stratigraphic position in the lowermost ~1 km of the volcanic succession;

The intensity of oil impregnation varies considerably from minor stains along dykes (petroliferous odour or minor visual oil on fresh sun-heated surfaces) to major reservoir-like accumulations at or near the surface. Most examples are from volcanic rocks overlying the marine sedimentary successions; however, in 1997 oil-impregnated sandstones were also reported from the mid-Cretaceous non-marine Atane Formation on the north coast of Disko. The two largest near-surface accumulations contain significant volumes of oil:

Marraat area: 6 x 4 km, oil zone several hundred metres thick, porous zones (10­15% porosity) in vesicular lava tops with an average thickness of 15 m, saturation close to 100%. Conservative calculations suggest a cumulative volume of at least 250 million barrels, but much more may be found in underlying volcanics and sediments.

Sikillingi area: 5 x 1 km, oil zone more than 50 m thick, porous zones (15­20% porosity) in hyaloclastites and volcanic conglomerates averaging 10 m in thickness, saturation close to 100%. Conservative calculations suggest a volume of at least 50 million barrels, but much more may be found in underlying volcanics and sediments.

Organic geochemical results

Organic geochemical results from the oil seeps and oil-stained samples show that degradation is surprisingly low (mainly evaporation of lighter compounds) and biomarker distributions or specific angiosperm biomarkers suggest the existence of at least five distinct oil types with origins from:

a non-marine source rock of mid-Cretaceous or older age (Kuugannguaq type);

The geographic distribution of the documented oil types seems closely related to the main structures of the basin. Several of the oil types may be geochemically correlated to outcropping sediments or potential source rocks that have been penetrated during drilling. Occasionally there is evidence of mixing of several of the oil types either during migration or trapping.

Results of the seep studies will be presented as a poster and at the core display at 5th Conference on Petroleum Geology of NW Europe, Barbican Centre in London, October 26­29, 1997; further information may also be obtained at the Greenland exhibition at the same conference or directly from the Geological Survey of Denmark and Greenland (GEUS) (contact Flemming G. Christiansen or Jørgen Bojesen-Koefoed). The results are considered very important for evaluating the hydrocarbon potential not only of the Nuussuaq Basin but also of the neighbouring offshore basins in West and North-West Greenland. The examples of oil generation from Upper Cretaceous and Paleocene sediments and migration into or through overlying Tertiary volcanics are also important analogues for exploration in the North Atlantic region, in particular the shelf of the Faeroe Islands.

Did Kangâmiut-1 find oil?

A new study published by GEUS (Rapport 1997/76) suggests that the Kangâmiut-1 well, drilled offshore West Greenland in 1976, may have penetrated an oil zone. During drilling, such high pressures were encountered that it took 9 days to control the pressure. Mud weights up to s.g. 1.8 (14 lbs per gallon) were used.

During circulation of the mud, up to 9% gas was recorded, containing up to C4. A drill stem test of the porous interval produced water which had the same chemistry as the drilling mud. The report concludes that it is possible that liquid hydrocarbons in the reservoir were simply flushed away during the mud operations.

Transfer of the Mineral Resources Administration to the Greenland Home Rule Government

All other elements of the Greenland Mineral Resources System will remain unchanged, including the joint decision-making competence of the Danish Government and the Greenland Home Rule Government, the Joint Committee on Mineral Resources in Greenland as well as the division between the Danish State and the Greenland Home Rule of public revenues from mineral resources activities.

The Danish Ministry for Environment and Energy and the Greenland Home Rule Administration are presently working on the administrative, economic, legal and other matters which must be clarified before the Danish Government can introduce the necessary Bills in Parliament.

It is part of the talks that a transfer of the tasks to the Greenland Home Rule Government may be divided up into phases. A time schedule for the transfer has not yet been set up.

Up to the date when a transfer of responsibility has entered into force, all tasks in relation to applicants and licensees will continue to be handled by MRA, and all enquiries regarding licences under the Mineral Resources Act therefore are to be made to MRA as up to now.

Petroleum licensing in West Greenland

Late 1996 the first exclusive offshore petroleum licence since the 1970s was granted for a part of the Fylla area offshore South-West Greenland. The exploration and production licence was granted to a group consisting of Statoil, Phillips, the Danish state-owned company DOPAS and the Danish/Greenland company Nunaoil. Statoil is operator for the group.

This event marks the reopening of the offshore exploration in West Greenland which since 1979 has not attracted significant interest from the oil industry.

The Statoil licence was granted as a result of an application procedure which, within the framework of the open door policy, was used for the so-called Fylla area delineated as the area between latitudes 63°N and 64°40'N and longitudes 53°W and 56°W.

Open door policy confirmed and extended

The open door policy is still in force. It applies to the offshore areas in West Greenland south of 70°30'N. However, within this area the remaining part of the Fylla area has in 1997 been excluded from the open door policy, see Map 2.

Also the onshore areas in West Greenland, mainly the Disko-Nuussuaq-region, and the Jameson Land onshore area in central East Greenland are covered by the open door policy.

Under the open door policy oil companies may at any time submit an application to the authorities. The Danish/Greenland authorities will then decide whether negotiations based on the application shall be initiated.

It is expected that the open door policy for areas offshore West Greenland will remain in force at least during 1998. However, the results of the first well(s) under the Statoil licence which will be drilled in 1998 or more probably in 1999 may very well lead to considerations by the Danish/Greenland authorities whether to continue with the present open door policy or to initiate licensing rounds.

Non-exclusive prospecting licences may still be obtained for all areas in Greenland not covered by exclusive licences.

Regional seismic data in the open door area

Seismic spec data offshore West Greenland were acquired by the authorities in 1990­92 and 1995. Prior to buying these data an arrangement can be made whereby a company can get access to the seismic data on a Landmark station at the Geological Survey for Denmark and Greenland (GEUS).

Exploration onshore in the Disko-Nuussuaq-region

Since 1994 the grønArctic group has explored onshore areas on Disko and Nuussuaq in central West Greenland. The group consists of the Calgary-based company grønArctic energy inc. and two mineral exploration companies in the Platinova group. In 1996 the grønArctic group had two licences in the region: the Nuussuaq licence (2,355 km2) and the Disko licence (1,011 km2).

During 1997 the Nuussuaq licence has been reduced to 988 km2, see Map 2 (see also Ghexis no. 11, April 1997).Relinquishment in the latter part of 1997 will further reduce the licence area to less than 400 km2.

The Disko licence was relinquished entirely by grønArctic in May 1997 and the geophysical data acquired by grønArctic in this area is no longer covered by confidentiality.

grønArctic plans a seismic program on parts of Nuussuaq in 1998.

Exploration in 1997

In 1997 the Statoil-group acquired 2,000 km of in-fill seismic within their licence area.

Nunaoil has acquired 2,300 km of regional spec seismic data offshore West Greenland, partly in areas north and west of the Statoil licence area (2,000 km), and partly further north in the Ikermiut and Kangâmiut areas (300 km).

grønArctic has not been active in the field in Greenland in 1997.

The KANUMAS Project

The offshore areas in North-West Greenland (north of 70°30'N) and North-East Greenland (north of 68°00'N) have during the period 1990-95 been covered by a non-exclusive prospecting licence to the KANUMAS group (BP, Exxon, JNOC, Shell, Statoil, Texaco and Nunaoil as operator). The seismic data acquisition in these areas has been completed and the data are for sale from Nunaoil.

In accordance with the terms of the prospecting licence, the KANUMAS group has preferential rights regarding those areas where seismic data have been acquired. These areas are indicated on the Map 2.

Annual Report for 1996

This year the annual report from the Danish/Greenland Joint Committee on Mineral Resources in Greenland has been translated into English.

The 1996 Annual Report covers developments in 1996 regarding mineral resources in Greenland. Separate chapters on hydrocarbons and minerals describe licences in force, ongoing projects and surveys, etc. The report includes small scale index maps showing all exclusive licences in force as of April 1, 1997. The annual report is available from MRA free of charge (see address on front page).